What is Car Dealership Fraud?

For many people, the ordeal of purchasing a vehicle can be an arduous process filled with anxiety and dread. Between analyzing a vehicle’s performance and maintenance history, comparing statistics like safety ratings and gas mileage and then going through the process of actually buying, leasing or financing a vehicle, sometimes you are left to wonder if the process is worth all of the stress. And unfortunately, there are even times when you have to wonder if you can trust the seller or the dealership from whom you’re considering buying the vehicle on top of everything else. The reality is ugly – sometimes you legitimately do need to worry about auto dealership fraud.

What exactly is auto dealership fraud? At the ground level, auto dealership fraud is any practice by a dealership that is considered deceptive and unlawful. These practices can happen at any point in time during the process of purchasing a vehicle and can include any one of the following:

“Bait and Switch”

This is an advertising tactic in which a dealership will advertise a particular vehicle at a certain price in order to lure potential buyers to shop at the dealership. When interest is expressed to buy this vehicle, dealers will report to the customer that the vehicle is no longer available. At this point, a dealer typically resorts to aggressive sales tactics to persuade the same customer into buying another (generally more expensive) vehicle or even the same model vehicle at a higher cost.

Mileage “Rollback”

Mileage rollback – also known as “odometer rollback” – is an illegal practice in which the odometer (the gauge that indicates a vehicle’s overall mileage use) is artificially changed. This is generally implemented to make the vehicle appear as though it has been driven for fewer miles than is actually the case.

Failure to disclose vehicle information

If you are in the market of purchasing a used vehicle, there are certain pieces of information regarding a vehicle’s history that car dealerships are required to disclose to you in many states. Some of this information includes an accident history if any, as well as if the car has suffered from flood damage or been titled as “salvaged.” This latter part means that the car has been deemed to suffer such damage – whether cosmetic or structural – that repairs would cost more than the market value of the vehicle itself.

Many people tend to confuse auto dealership fraud with the Lemon Law, as both pertain to motor vehicles that may suffer from persistent issues. However, in the case of auto dealership fraud, the problem tends to stem from a lack of disclosed information about the vehicle, whereas the Lemon Law tends to apply only to manufacturing defects and a failure to correct these problems within a reasonable number of attempts. In the case of auto dealership fraud, it is advised to consult an attorney specialized in such matters and to write correspondence to the dealer in an attempt to correct the issue before bringing legal action against them – do not simply discuss matters with them in person, as enforcing verbally-made promises are more difficult than hand-written ones.

The easiest way to handle auto dealership fraud, however, is an attempt to avoid it altogether. Doing independent research of your own can go a long way to prevent auto dealers with poor intent to fool you. This includes the ability to survey a vehicle’s history using one of several available services online. Holding correspondence through the phone with e-mail confirmations from the dealership whenever possible can help avoid the hassle of being pressured into the “bait and switch” tactic by being assured in writing beforehand that the vehicle you originally intended to shop for is still actually in stock. Regarding maintenance, always have an independent repair shop inspect your vehicle to ensure everything is in good working order as well as to assure yourself of when parts need replacing – some dealers will attempt to persuade you into spending money earlier than necessary on parts you don’t even need.

Disclaimer

The information presented on this site should not be considered legal advice. The publisher of this site nor any of its contributors warrant the accuracy of the information presented and cannot be held responsible for any incidental or consequential damages resulting from reliance on such information.